Singapore-based COSCO (Nantong) Shipyard Co. is to scrap the Octabuoy project after failling to find a buyer for the unit.
COSCO (Nantong) Shipyard was contracted to build the Octabuoy unit for ATP Oil & Gas' Cheviot field in the UK North Sea.
Howvere, ATP went into a company voluntary arrangement (CVA) in July 2014, after ATP’s former parent company, ATP Oil & Gas Corporation filed for a Chapter 11 bankruptcy protection. COSCO was paid an initial US$5 million debt repayment for the project in December, and the firm had been looking for a buyer for the unit.
"While COSCO Nantong has been making efforts to find a buyer for the Octabuoy and several potential buyers had previously expressed interest, COSCO Nantong has so far not entered into any agreement for the sale," the firm says. "The steep fall in crude oil prices over recent months has had an adverse impact on the global offshore marine industry. This has made it even more difficult to secure a buyer for the Octabuoy as industry players have cut back even further on new orders. This difficulty is compounded by the specialised design of the Octabuoy and the substantive investment in the customised equipment that is required to continue the project.
"In light of the above, a decision has now been made by the management of COSCO Nantong to discontinue the project and this is expected to result in a one-off charge of approximately S$90 million for the company for the financial year ended 31 December 2014."
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